Being told not to return to work during your notice period can feel like an unexpected relief, a professional setback, or both. Garden leave rules determine what happens next: whether you remain paid, what contact you can have with clients and colleagues, and whether you can start work elsewhere. The answer usually begins with your contract, but the wording must be read alongside wider UK employment law.
Garden leave is often used where an employee holds sensitive information, has strong client relationships, or is moving to a competitor. It can also be appropriate where a continued presence at work would create tension during a handover. For employees and employers alike, the central issue is not simply whether someone is at home on full pay. It is whether the arrangement is authorised, reasonable and managed properly.
What is garden leave?
Garden leave is a period during notice when the employment relationship continues but the employee is instructed not to attend work or carry out their usual duties. They remain employed until their termination date. Their contractual obligations continue too, including duties of confidentiality, fidelity and compliance with lawful and reasonable instructions.
The name can be misleading. An employee may be asked to remain available to answer questions, help with a handover, return company property or attend meetings. They cannot normally treat the period as free time to work for another business, even if there is little or no work to do.
Garden leave is different from payment in lieu of notice, usually called PILON. Under PILON, employment ends immediately and the employer pays for the notice period, provided the contract permits this or the parties agree it. On garden leave, the employee is still employed and continues to receive contractual pay and benefits. It is also different from suspension, which is normally a temporary measure while an employer investigates a workplace issue.
The legal basis for garden leave rules
There is no general statutory right for an employer to place an employee on garden leave. The strongest basis is an express garden leave clause in the employment contract. A well-drafted clause will say when leave can be used, confirm that pay and benefits continue, and set out the restrictions that apply.
Without such a clause, an employer may still propose garden leave, but it carries more risk. Removing someone from their role could amount to a breach of contract, particularly where the employee has a real right to work. That argument is more likely to arise where a person needs to maintain professional skills, public standing, commission opportunities or creative output. Seniority alone does not decide the point.
An employee can agree to garden leave even where the contract is silent. Agreement should be recorded clearly. Employers should avoid assuming that a broad management power is enough, especially where the notice period is lengthy or the arrangement prevents the employee from earning commission or maintaining client relationships.
Reasonable restrictions matter
A contractual clause does not give an employer unlimited control. Restrictions should protect a legitimate business interest, such as confidential information, customer connections or workforce stability. The longer and more restrictive the arrangement, the more carefully it should be justified.
For example, stopping a departing sales director from contacting key customers during a three-month notice period may be sensible. Preventing a junior employee from taking any outside work during an extended notice period, where there is no genuine risk to the business, may be harder to defend. Each case turns on the role, contract, business interests and circumstances of departure.
Pay, benefits and holiday during garden leave
Employees on garden leave should normally receive their usual basic salary and contractual benefits, such as pension contributions, private medical cover, car allowance and life assurance. If the contract provides for bonus, commission, share awards or other incentives, entitlement will depend on the relevant scheme rules and the wording of the contract.
This is often where disputes arise. A commission plan may require the employee to be actively employed on a payment date, or may exclude commission on deals completed after garden leave starts. Those provisions need close scrutiny. An employer cannot simply relabel earned commission as discretionary to avoid payment.
Holiday continues to accrue while an employee remains employed. An employer can require holiday to be taken during garden leave, but must give the statutory notice required by the Working Time Regulations unless the contract makes a valid alternative arrangement. In most cases, notice must be at least twice the length of the holiday to be taken. Untaken statutory holiday must be paid on termination.
Employees should also check their tax position and payslips as normal. Garden leave is not a break in service, so continuous employment, pension service and other length-of-service rights generally continue until the actual termination date.
What an employee can and cannot do
The written instruction placing an employee on garden leave should set clear expectations. It may require them to remain contactable during working hours, avoid contacting customers or suppliers, stay away from workplace systems, and return devices, documents and keys. It may also require disclosure of approaches from competitors.
The employee should not remove, copy or forward confidential information, even if they believe it will help them prepare for a new role or support a future claim. Confidentiality obligations can continue after employment ends, and misuse of data may create serious legal exposure.
Starting a new job before the notice period ends is another common flashpoint. Unless the employer agrees in writing, an employee remains bound by the duty of fidelity and any exclusivity provisions in their contract. Working for a competitor while still employed can lead to allegations of breach of contract or misconduct. A sensible employee asks for written consent rather than relying on an informal conversation.
If an employee believes garden leave has been imposed without contractual authority or in a way that causes financial loss, they should take advice promptly. Resigning in response may have significant consequences and is rarely a decision to make without understanding the contractual and tribunal risks.
Using garden leave effectively as an employer
For employers, garden leave should be a considered protective measure, not a default reaction to every resignation. It can give the business space to protect relationships and plan a transition, but it also means continuing to pay someone who may no longer be producing work. In some cases, a shorter period combined with carefully drafted post-termination restrictions may be more proportionate.
Before issuing instructions, employers should review the contract, notice provisions, restrictive covenants, incentive arrangements and any ongoing grievance, disciplinary or redundancy process. Garden leave should not be used to sidestep a fair process. If dismissal is contemplated, the employer must still follow an appropriate procedure.
A written garden leave letter should address at least the following points:
- the start date, end date and contractual authority for the arrangement;
- pay, benefits, bonus or commission treatment, and holiday arrangements;
- availability requirements and who the employee should contact;
- restrictions on work, clients, colleagues, systems and confidential information; and
- return of property, access to personal belongings and the consequences of breach.
Consistency is valuable, but not at the expense of judgement. A blanket approach can be difficult to justify. The instruction should reflect the employee’s access to information, the risk of competitive activity, the length of notice and what the business genuinely needs to protect.
Garden leave and restrictive covenants
Garden leave and post-termination restrictive covenants often work together. Time spent on garden leave can keep an employee away from clients and sensitive information while they remain paid. This may reduce the period for which a non-compete covenant is needed after termination, although the contract must say so if garden leave is intended to offset a post-termination restriction.
Post-termination covenants are not automatically enforceable. Courts will consider whether they go no further than reasonably necessary to protect a legitimate interest. Employers should not assume a garden leave clause fixes an overly broad non-compete clause, and employees should not assume every restriction is invalid.
When early advice is worthwhile
Garden leave is frequently raised alongside a resignation, dismissal, settlement agreement or move to a competitor. The documents and timing matter. A poorly handled instruction can affect pay, commission, restrictive covenants and the prospects of resolving a dispute without litigation.
For employees, the immediate priority is to preserve the contract, garden leave letter, payslips and relevant communications, then obtain clear advice before taking a new role or challenging the arrangement. For employers, acting early can protect confidential information and customer relationships while reducing the risk of a contractual claim. Arcos Employment can provide clear guidance on the position and help you take the next step with confidence.